The Managing Director of the Bulk Oil Storage and Transportation (BOST) Company, Edwin Alfred Provencal has stated that government’s Gold for Oil programme has helped reduce prices of petroleum products at the pumps.

He added that this has also help reduce inflation.

“We should not forget that prices in Ghana was hovering around ¢23 in 2022, but that has come down significantly. The Gold for Oil programme has been a major contributing factor”, Mr. Provencal said.

He argued that “one cannot rule out the contribution of the Gold for Oil programme to this development”.

He made the statement when he appeared on PM Express, Business Edition, with George Wiafe on July 20, 2023.

He insisted that the programme should continue, contrary to suggestions by some industry watchers that it should be scrapped.

Mr. Provencal is optimistic that the programme will help prices go down further at the pumps in the coming months. 

Gold For Oil Programme

The Gold for Oil Programme formally kicked off on January 15, 2023 with the arrival of first consignment of about 40,000 metric tonnes of diesel valued at $40 million. 

The prime objective of the programme  is to use additional foreign exchange resources from the Bank of Ghana's Domestic Gold Purchase(DGP) programme to provide foreign currency for the importation of petroleum products for the country which currently stands at about US$350 million per month. Under the Barter Channel, suppliers willing to take gold in direct exchange for petroleum products will be provided with the equivalent volume of gold by the Bank of Ghana.

The programme allowed the Bank of Ghana and International Oil Trading Companies to open Gold Metal Accounts in a mutually agreed gold refinery for the purpose of gold transfer.

Payment for oil supply is to be done in two channels: by way of barter trade where gold is exchanged for oil or via broker channel where the gold is converted into cash and paid to the supplier.

Industry concerns on Gold for Oil Programme

The Chief Executive of the Association of Oil Marketing Companies Kweku  Agyemang Duah has argued that the time has come for government  to halt the programme.

He maintained that current market development do not support the initiative.

 “The programme was needed some time around last year, however looking at what is happening now, it is not worth it,” he said.

In addition, the Executive Secretary of the Chamber of Petroleum Consumers, Duncan Amoah recently raised concerns about the programme.

According to him, the programme is no more serving its purpose, hence must be stopped.

BOST seeks increase in margin on petroleum products

Mr. Provencal stated that BOST is appealing for an increase on its margin.

He explained that an increase will help the company improve its infrastructure.

Government has placed 9 pesewas on every litre of petroleum products sold at the pumps to support the operations of BOST.

BOST turn around and financials

BOST recorded a loss of ¢456 million in 2021 and posted a profit after tax of ¢160 million in 2022.

There is the likelihood that it will double the ¢160 million posted in 2021.

Mr. Provencal links this growth in profit and turnaround of the business to staff, management and the board of the company.